Deutsche Bank Starts Talen Energy (TLN) at Hold

Deutsche Bank initiated coverage on Talen Energy (NASDAQ: TLN) with a Hold rating and a price target of $23. Analyst Abe Azar thinks the spin-off faces more risks than its peers.

"Talen has substantial exposure to PJM’s capacity reform, a theme we’ve liked for nearly a year, with upside of ~30% if all breaks right. At current levels though, the bull thesis for TLN is almost entirely dependent on a favorable CP outcome, not the case for other PJM exposed names, while TLN faces risks that its peers do not. For example, TLN’s Susquehanna nuclear plant, ~40% of EBITDA, has performed in the bottom quartile for 4 years, and is a “show me” situation. TLN could also suffer technical selling pressure as it is spun from its 4.4% yielding S&P 500 utility parent PPL, and has a further overhang in 35% shareholder Riverstone," said Azar.

For an analyst ratings summary and ratings history on Talen Energy click here. For more ratings news on Talen Energy click here.

Shares of Talen Energy closed at $0.08 yesterday.

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